Descending into a basement bar at the cold dark end of the year, I entered a half-lit pit of a room, its concrete floor obliterated by peaks and troughs of shredded paper, which are in turn strewn with drawing pads and coloured pens − the outside world is kept at bay by the heavy velvet curtains cloaking off the room from the stairs leading to the street.

This has to be one of the most intriguing settings for a reading or a literary event, usually so awkward and somehow forced. Along with the other 30 or so people present, we loll and recline in this temporary bleached-out cocoon. This installation, which is an homage, in part, to the recently deceased artist Dash Snow monumental NEST works, is an immersion of the senses.

Suddenly, perched on a small wall dividing the space, a young woman opens up a large leather-bound book and in a very self-assured but light voice begins to read episodes from another young woman´s life which seems to be most definitely unravelling. Perhaps Alice had a twin sister who got took a wrong turning in Wonderland to emerge wide-eyed and unblinking from the rabbit-hole, into the 21st century.

And so Rachel Newsome, former editor of Dazed and Confused and Trash magazines, begins her ludically entitled "Don´t Tell Stories" evening at the Book Club, Great Eastern St, Shoreditch, where she treats the audience to extracts from her first novel "As it was in the Beginning".

And after she closes her book, dj and producer Andrew Weatherall plays music which leads us further into our imaginations with a set inspired by Rachel´s writing. "We want womblike," he decided on reading her work, inquiring, "How womb do you want to go?" His soundtrack recalling Robert Frost´s the lines: "The woods are lovely, dark and deep, But I have promises to keep, And miles to go before I sleep".

So when I met Rachel a few days later I wanted to find out how what has led her to Don´t Tell Stories.

How did this project come about?

I became involved with a lovely project, the "House of Fairy Tales" which the artists Gavin Turk and his partner Deborah Curtis, (the creative director of the House of Fairy Tales), who are also my neighbours, have set up. It is an all-age, anarchic, theatrical arts project which has been going for five years. They organise events, workshops and performances collaborating with scientists, actors, artists, illustrators and filmmakers and aimed at children but which works at many levels. So far the House of Fairy Tales have hosted events at Tate Modern, and in the children´s area at the Latitude, Glastonbury and Port Eliot festivals. There are about 50 people involved, all dressed in costume and we create this theatrical space using the narrative of fairy tales but we are interested in exploring their darker, more psychoanalytic aspect. This was a very liberating place to be and where my project "Don´t Tell Stories" originated.

It´s origin?

Don´t Tell Stories has evolved very organically. I led some evening events at some of the festivals which were more teenage things. And when I came back to London I wanted to do something here, so the first London Don&#8217;t Tell Stories took place in the beautiful wood-panelled Victorian chapel at Oxford House in Bethnal Green, as part of the Publish and Be Damned self-publishing fair this September. The chapel was lit with an altar candle and had a very sacramental feel to it. And all the material used in Don&#8217;t Tell Stories is my own, taken from my novel "As it was in the Beginning".

The environment you created at your event at the Book Club was a very impressive spectacle.

It was a lot of hard work. It was the art director Maitland Mason´s (who is also involved in the House of Fairy Tales) idea. I wanted to work with an art director as I am a writer so I wanted to collaborate with someone who was very visual. The original idea was to encourage people to walk into a space and to feel comfortable enough to use the drawing materials freely. The drawing aspect was enabled by the art community RART.And then it grew into "let´s fill the space with paper". So after a lot of research, we bought a huge hay bale of shredded recycled paper, 2m x 1m x 1m in size, from a warehouse in Essex. I don´t do things by halves. I mean business.

How do you think it worked as an event?

It felt so comfortable to sit there and read. It was very womb−like and that was one of the environments I wanted to create. We are learning as we go along. We are happy to take risks and the feedback I have received is that the people present really enjoyed going into another world. I am very interested to see where it can go next. I am very ambitious and am just responding to opportunities.

However, I was not only interested in doing readings. I am very interested in sharing words in different ways, using different channels, in how things take on a life of their own, and also engaging with other people and their imaginations. I remember as a child sitting on the story-telling rug at school whilst the teacher read to us. It was lovely, escapist, very comforting and soothing, but it is also a learning process and how we give meaning to our experience. I think stories and storytelling give us a framework to understand what is going on in the world.

Where do you think the impulse to tell stories comes from?

I think storytelling is how we construct meaning and how we construct our identity, and it is as old as humanity. It´s how we understand memory. And there are certain kinds of archetypes that we all understand – the labyrinth, the monster, the wicked witch. These exist through time, through culture.

For me western contemporary society is very much about instant gratification and self-determination. It is very individualistic and is all about consumerism. I think what is lovely about storytelling is that it is concerned with community and sharing and trying to understand how we connect to each other. This is more important now than ever before.

What effect do you think the phenomenon of condensing experience into status updates and a 140-character tweet will have on storytelling?

It is people trying to share and make gestures. Along with some of the House of Fairy Tales members, Maitland and I are also participants in the ongoing "Exquisite Trove" project at the New Gallery, Walsall. For this, I wrote a poem in response to some of Maitland´s photographs and we displayed a business card in the gallery, which simply has a phone number and the words "Text me" – rather like the "Drink Me" and "Eat Me" signs Alice finds at the beginning of her adventures in Wonderland.

On receiving a text, we send fragments of one of my poems and some of Maitland´s images to the sender, which they can collect. The recipients also text us back their responses. This is just an example of one way storytelling can evolve.

And remember, TS Eliot´s "The Wasteland" was constructed from a multiple series of fragments – Dante, the "Golden Bough", the "Upanishad", Ovid, Dickens and so on. People are very sophisticated and they understand that under the tip of an iceberg, there is a huge mass underneath. However the danger is that you lose the mass and I think that needs to be understood.

Do you think the digital age will have its equivalent of Proust´s "Remembrance of Things Past" or Tolstoy´s "War and Peace"?

I think that as society becomes more and more fragmented, the arts become more and more niche. And there will always be tiny niches for those huge ambitious works, I am not sure if they will be massively popular though. But if there is enough demand, then who knows? The internet serves that niche very well as it connects people who wouldn´t have been in contact otherwise and creates communities of people who like the same things. Social networking and online media are tools. I love that people communicate through Twitter, Facebook and email. However, my fear is that this is just a distraction.

A distraction from what?

One of my biggest beefs, if you like, is that we live in a culture that is set up to distract us, which stops us from seeing the bigger picture. We are living through very turbulent times and the truth is very uncomfortable. But we fill our heads up with distractions so we don´t have to think about the truth. I guess what any artist would say is that we are trying to get people to think. The drive behind everything that I do is to try to get people to re-evaluate what they see and where they are. Because if you can´t use your imagination, you can´t imagine what the world will be like in 50 years.

Could you tell me something about your novel "As it was in the Beginning"?

It is the most intense journey I have ever been on and I´ve been on a fair few! It was long, arduous, intense and solo. As you are on your own, you have to push yourself as far as you can. The literary fiction market is the hardest one to break into and most agents won´t touch you. You have to go to them with a package, with the more-or-less finished thing. But I now have an agent, Cathryn Summerhayes at William Morris agency, who represents some wonderful writers and who also runs the literary tent at Bestival and who gets the whole Don´t Tell Stories vibe.

Have you always wanted to write fiction?

As a child I all I wanted to do was write. I wrote poetry, diaries, had my head buried in books – the classic teenage thing.
All I was ever interested in was writing. Journalism was the practical world.
And I have lived through the whole media whirlwind, which has been amazing.
But I have no interest in pursuing a career in it.

My book is five years in the writing, although I have had breaks from it, I am on my third draft now. I have a vision and I am trying to translate that. This is the eternal journey. I don´t think one can ever write the perfect novel. Perhaps poetry is the nearest thing to perfection in writing.

What was the starting point of your novel?

It was looking at all my friends and all the people around me − all beautiful, clever and amazing − and asking the question: "How did we get to be so fucked up?" My book is about a photographer, Annie, who takes pictures of her friends in order to understand her own life.

In terms of the book, who, if anyone, has inspired or influenced you?

I was very inspired by the American photographer, Nan Goldin. I was struck by how each of her pictures seem to construct narratives, telling stories again. I also adore the US writer Susan Sontag´s book "On Photography" which seems prophetic if you think about how people construct their identity nowadays through images, through social networking, Facebook, or their clothes. It´s like the Wildean project of becoming the person you always dreamt of being.

I wanted to write a modern-day myth and the nearest example I could find in literature was Virginia Woolf´s "Orlando", in which Woolf creates a character that exists across space and time.I wanted my book to have a non-linear narrative as I believe our notion of reality is quite tenuous. I think there is a lot that we don´t see. I am more interested in allegory. In my book, I wanted to explore the idea that artists, like Annie, are like modern-day suffering saints, like Joan of Arc – back to the whole fairytale myth – seeing visions and hearing voices. Annie is very neurotic, overcome by the enormity of her existence, and obsessed by death. And for her photography is a way of cutting through it, and a way of seeking immortality.

How have you found writing it?

I have found it really hard. I worked really hard at the voice, some of which is in her head, some of which is dreamlike. Some of it is straight storytelling too. I shifted the texture of the prose a lot. One of my biggest challenges was to find a language that wasn´t hysterical and not sentimental. I want to engage with big themes, such as death and immortality. I think British writers are quite parochial and I think I am dealing with material that British writers, especially female ones, don´t take on.I am an ambitious writer.